14 DAY TRIAL // When Amazon acquired online shoe and apparel retailer Zappos for close to $1 billion it got a little treat in the deal as well, the clothes.com domain name. The domain was bought by Zappos last year for a cool $4.9 million, one of the biggest domain name transactions of the year. While currently used to house a custom Zappos page, it does show that the company may have plans to move further in the apparel business.
The asset was actually disclosed in Amazon's regulatory SEC filing on the deal but it didn't surface until now. “In May 2008, we acquired the Clothes.com internet domain name from Idealab. The domain name was recognized as a purchased intangible asset with a useful life of 20 years. The entire purchase price of $4.9 million was assigned to the price of the domain name intangible asset and will be amortized on a straight-line basis over its remaining estimated useful life,“ the filing reads.
The transaction would come only under Fund.com, which sold for close to $10 million in 2008, easily the second biggest deal of the year. This year showed a drop in the number and especially the value of domain name transactions but not by as much as the current economic conditions might have dictated so the deal would be very close to the biggest sale this year, Toys.com for $5.1 million.
Currently, clothes.com sends users to a “Product Smackdown” page asking them to vote on two products. It generates about 3,000 unique visitors per month, according to Compete, hardly a large number and a great investment, but Zappos probably has bigger plans for the domain. While it does sell clothing as well, Zappos is primarily known as a shoe retailer. The company has been recently acquired by online retail giant Amazon but will continue as a separate product and an independent division within the company.